Need to develop a monetary policy framework that integrates inflation & financial stability risks – BOC Governor Poloz

FXStreet (Mumbai) - During his speech at the Western University in London, Ontario Bank Of Canada's (BOC) Governor Stephen Poloz called for reinvention of central banking to include both inflation and financial stability risks under one policy at the time when both elements have been rattled by a sudden drop in oil prices.

The central banker noted, "We need to develop a monetary policy framework that integrates inflation risks and financial stability risks … and captures more accurately the uncertainties we face," "I hope to inspire economists here and elsewhere to join these efforts.

"Keeping inflation on track certainly was not sufficient to keep us out of trouble,"

"We need to take into account of a wider range of economic and financial consequences while targeting low inflation."

Poloz argued that evolution is "already underway," but it is not enough. "[It] feels to me like we are adding various rooms onto a house we love, rather than creating a new, elegant, coherent structure."

Poloz added that "the oil-price shock is an important setback in our progress towards full capacity, full employment and stable inflation."